Capri Holdings' Revenue Plummets, FTC Blocks Merger
Capri Holdings, the parent company of luxury brands like Michael Kors and Jimmy Choo, has faced a challenging fiscal year. Revenue dropped to $3.5 billion, down from $4 billion in the previous year. Meanwhile, the Federal Trade Commission (FTC) has sued to block Capri's planned $8.5 billion merger with Tapestry, owner of Coach and Kate Spade.
Capri's fourth quarter results showed a significant decline, with revenue falling by 8.4% to $1.2 billion year over year. This drop was echoed across its brands: Michael Kors' revenue fell by 9.7%, Jimmy Choo by 9.3%, and Versace by 3.6%. The company attributed these declines to a global softening in demand for luxury fashion goods.
Contrasting Capri's performance, Italian luxury brands Prada and Zegna reported robust revenue growth, indicating uneven market challenges. Capri's full-year revenue also fell by 8% to $5.2 billion.
Capri Holdings plans to defend the FTC lawsuit and expects the merger with Tapestry to proceed. Despite expressing disappointment with the fourth quarter results, CEO John Idol anticipates free cash flow to normalize by fiscal 2025. Meanwhile, Michael Kors Holdings has announced plans to file a lawsuit against Capri Holdings and Tapestry regarding the proposed merger.
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